The rise of streaming games, death to gamestop?

    What does rise of streaming games mean for GameStop?

    When Sony introduced its much-anticipated PlayStation 4 gaming console in February, it did not unveil the actual piece of gaming hardware, leaving fans in the dark as to how the console's look had evolved.

    But that decision -- to keep the PS4 hardware under wraps and focus on the gaming experience -- highlights the trend toward digitization in gaming. For the first time ever, all PS4 games will be available for digital download. No doubt we can expect the same for upcoming next-generation consoles from Microsoft and Nintendo.

    Many pundits believe that digital games could sound the death knell for brick-and-mortar gaming retailers like GameStop, which are heavily dependent on selling new and used video games. (In its most recent fiscal quarter, used games sales represented a significant 48% of GameStop's gross profits.) The challenges facing GameStop are somewhat more complex, however.

    "Digital games obviously kill the used games market," Joey Davidson, gaming editor at tech news website Techno Buffalo, tells Minyanville. "Once these games are offered up on the digital networks, GameStop is never going to touch them because Sony will take them out of its hands entirely. The model will be: Buy once and done. You'll never be able to resell used games."

    Though Davidson acknowledges that the digitization of videogame distribution will hurt GameStop, he believes that the market for new and used physical games will continue to be viable for the foreseeable future, pointing out that "30% of all consoles from the last generation never connected to the Internet. We're talking about a third of the market that doesn't even use the online capabilities."

    Additionally, Davidson adds that gamers might still prefer to own a physical product. "If I have a physical game, it's mine and I own it forever. If, down the line, Sony goes under, I won't be able to play those digital-only games anymore. If I lose my console, I can't download them again. Physically owning a game means owning it for good," he opines.